Indian issues: regionals seek role in expansion strategy

Growth expectations are reflected by aircraft manufacturer Boeing, which predicts that Indian airlines will need 1,450 new aircraft in the period 2012-31. "India will have the highest passenger traffic growth in the world, higher than even China's in the next 20 years," Dinesh Keskar, Boeing's senior vice-president for Asia-Pacific and India, said in September 2012.

Airport capacity remains a challenge and industry analysts estimate that about USD40 billion of investment will be needed to upgrade infrastructure by 2025, including 50 greenfield airports. Private finance will be approached for a large portion of this, creating opportunities for domestic and foreign investors.

It is clear that India is under-prepared to face the major airport capacity challenge as domestic funding remains insufficient to support expansion. "If foreign investment is to be attracted, India will need to provide external capital with greater confidence with respect to market risks. This will require clarity on the regulatory framework, improved governance, enhanced co-ordination between stakeholders and stronger execution capabilities," the Centre for Asia Pacific Aviation (CAPA) concluded in an August 2012 report.